Meralco’s P15.9-B investment in SPNEC to advance solar-energy storage projects

By The President NewsOctober 13, 2023October 13, 2023

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MANILA – The P15.9 billion investment to be injected by a subsidiary-company of Manila Electric Company (Meralco) into the Leviste-founded SP New Energy Corporation (SPNEC) will help ramp up the development of the latter’s pipelined solar-plus-energy storage projects.

The utility firm announced that MGen Renewable Energy, Inc. (MGreen), which is the renewable energy development arm of Meralco Powergen Corporation (MGen) will be infusing that scale of capital investment into SPNEC; and that will be done through subscription to 15.7 billion common shares and 19.4 billion redeemable preferred voting shares of SPNEC.

“The fresh injection of capital by MGreen will fund the construction and expansion of its solar projects,” the power firm emphasized.

MGreen explained that “to enable the investment, SPNEC will file its application for an increase in authorized capital stock.”

At closing phase, MGreen noted that the resulting common and preferred voting will re-position it as the controlling shareholder of SPNEC – with its total voting interest already hovering at 50.5%.

On the solar development space, MGreen will already take on the earlier plan of SPNEC to advance the development of 3,500 megawatts of solar facilities with a technology coupling of 4,000 to 4,500-megawtt hours of energy storage.

Then the output of that renewable energy plus storage system will enable SPNEC to deliver its committed mid-merit capacity of 850 megawatts to Meralco on the targeted delivery date by 2026.

“MGreen has agreed with SPH (Solar Philippines) to use SPNEC as the primary vehicle to develop 3,500 megawatts of solar panels and 4,000 megawatt-hours of battery energy storage systems in Luzon,” Meralco expounded.

According to Meralco Chairman and CEO Manuel V. Pangilinan, the RE development plan of SPNEC “will be one of the largest solar projects not just in Asia, but in the world.”

He added that the mammoth installation will be in support the Department of Energy’s (DOE’s) vision “to have about 35% of the country’s energy come from renewable energy, and this is one of Meralco’s major contributions to this goal.”

Leandro Leviste, CEO of SPNEC, stated that the new investment of MGreen will synergize his company’s project development potential with that of Meralco to bring the targeted RE installations to commercial fruition.

“We look forward to bring together Meralco’s capabilities and our solar developments for the benefit of all stakeholders,” he stressed.

For the capital infusion, Meralco qualified that the transaction completion “is subject to the satisfaction of certain conditions precedent, including the relevant regulatory approvals.”

The financial advisor to MGreen and Meralco in the deal had been UBS, while legal advisor was SyCip Salazar Hernandez and Gatmaitan and Gulapa Law; while SPNEC and Solar Philippines had been advised by King & Spalding and Picazo Law.

The P15.9 billion investment to be injected by a subsidiary-company of Manila Electric Company (Meralco) into the Leviste-founded SP New Energy Corporation (SPNEC) will help ramp up the development of the latter’s pipelined solar-plus-energy storage projects.